While Velocity Credit Union ultimately denied my credit application for this small loan, they did respond very quickly when I posted the following letter on the Velocity Credit Union Facebook page. After reviewing my application again, they came back with this offer: They would loan me the $500 if I agreed to refinance my vehicle, which was 52% paid off at the time, and roll the $500 for the water heater into the refinance. My interest rate on the remainder of my car loan would go from just above 2% to more than 15%. In other words, to borrow $500 I would have to finance approximately $9,000 at a 15% interest rate. I declined their predatory offer.
I want to share my experience here on my blog because I know there are so many of us who face the challenge of having a small but really important credit application denied even when we meet all of the lender’s listed requirements. I’m not really picking on Velocity Credit Union, or even the financial system itself.
It’s just untenable that we as a society have collectively agreed to allow the financial system to kick people when they are down, particularly people with solid credit histories for whom such a small loan could be the difference between ….well, life and death really. If you need any kind of safety net, the “system” sends its vultures to wait around for your carcass after their jackals have had their way with it.
Here’s the post I made to the Velocity Credit Union Facebook page in response to their initial rejection of my application:
I guess a working mother who pays her bills on time isn’t the kind of customer Velocity Credit Union wants to keep.
I have been banking with Velocity ever since I purchased a vehicle in 2016. I recently applied for an Austin Energy Loan to help me replace a broken water heater. Since I experienced a job loss, I make income by renting space in my home to others. It is VITAL that I provide hot water to guests here so that I can meet my own financial obligations, including the aforementioned car payment.
I had thought that Velocity Credit Union would at least consider the fact that I have never missed a payment or been late paying ANY of my bills INCLUDING THE CAR PAYMENT I MAKE TO VELOCITY CREDIT UNION EVERY MONTH and that MY CREDIT SCORE EXCEEDS THE REQUIREMENT stated on the Austin Energy Loan application.
Unfortunately, my request was denied due to the fact that I’ve had to use my credit cards to get by for a bit. They are all in good standing other than the fact that I used them and I maintain and exceptional payment history. Velocity states that my credit obligations are excessive, but they obviously are not since they are paid every month. They will be excessive if I lose my rental income.
As a result of the credit union’s decision, I am unable to replace the water heater, and my tenants will probably be moving out next month, leaving me unable to make the car payment or any of the payments normally would be making. Thanks for nothing Velocity Credit Union, I do not feel like a valued customer at all. Have a splendid day!
With the Velocity Credit Union credit application denied, I worried that having the hard inquiry on my credit record would make it impossible to find any sources of credit, but I was able to get a Home Depot credit card with just enough credit to replace my water heater. I have since paid the water heater off, even beating the six-month deadline to avoid any interest charges.
Share your own experience of being kicked while you were down in the comments section below! Maybe one day, we can do something to change things for the better.